Virginia National Bankhttp://www.readthehook.com/taxonomy/term/5357/all
enBroken condos: Barracks West complex sold shorthttp://www.readthehook.com/107681/broken-condos-barracks-west-sold-short
<p>The condo-craze bubble is officially popped. Developer Hunter Craig was part of a team that paid $32 million in 2007 to turn student-apartment complex Old Salem into a condo-plex renamed Barracks West. That recently sold for a bottom-scraping $13.3 million. After putting $4.5 million into repairs and renovations, the new owner plans to return it to the rental market.</p>
<div class="sidebar">
<h2>Related stories</h2>
<p><a href="http://www.readthehook.com/103944/bank-battle-vnb-boss-wants-himself-and-craig-out">Bank battle: VNB titan wants back in (and Craig out)</a></p>
<p><a href="http://www.readthehook.com/102630/barracks-west-condo-aversion">Condo aversion: Craig's Barracks West a cautionary tale</a></p>
<p><a href="http://www.readthehook.com/85303/onarchitecture-mondo-condo-lessons-last-years-craze">Mondo condo: Lessons from last year's 'craze'</a></p>
</div>
<p>"We've gotten pretty active in the broken-condo market," says Michael Brodsky with the Bethesda-based Goldstar Group, the new owner of 265 of Barracks West's 364 units.</p>
<p>Craig's Cheetah Investment Company sold only 99 units in Barracks West, most of those to investors. In October 2011, SunTrust Bank, which lent $22 million for the complex, <a href="http://www.prweb.com/releases/2012/10/prweb9958768.htm">according to a Goldstar release</a>, appointed a special receiver after the loan went into default.</p>
<p>Virginia National Bank, where Craig is a founder and board member, notes the receivership in an April proxy statement. Craig did not return a phone call from a reporter at press time, nor did Virginia National Bank president Glenn Rust.</p>
<p>The unsold units were marketed earlier this year in the $27- to $28-million range. And while Craig's group&#8211; which reportedly included Craig's father-in-law Wick McNeely and music mogul Coran Capshaw&#8211;&nbsp; paid an average of $87,000 per unit and sold 99 units for an average of $130,000, some buyers were unfortunate enough to pay as much as $175K for a condo in 2007. Goldstar is picking up the remainder for about $50,000 each.</p>
<p>Goldstar has a "value add" philosophy, according to Brodsky. Barracks West fits its "broken condo" model, and the company likes Charlottesville's location and market, he says.</p>
<p>"There's significant deferred maintenance that needs to be done," says Brodsky. "We think we can restore Barracks West to where it should be in the market."</p>
<p>And that means rental units, not condos, says Brodsky, noting that Goldstar may buy back some of the condos. He says he doesn't see any rebound in the condo market for the next 10 years or so.</p>
<p>New tenants to Barracks West can look for upgraded maintenance along with improvements, including a redone clubhouse, larger pool, and children's playground.</p>
<p>"We're bullish on the market and Charlottesville in general," says Brodsky, who hints, "I hope we can do more acquisitions down the line."</p>
http://www.readthehook.com/107681/broken-condos-barracks-west-sold-short#comments_BreakingNewsBusinessFeaturedReal Estatebarracks westcondogoldstar groupHunter CraigVirginia National BankReal Estate - On the BlockTue, 02 Oct 2012 15:38:43 +0000lisa107681 at http://www.readthehook.comFeud ends: Giles cashes as VNB heads for buying spreehttp://www.readthehook.com/103990/feud-ends-giles-cashes-vnb-heads-buying-spree
<p>If anyone were expecting fireworks or fisticuffs at the annual meeting of Virginia National Bank Monday night, they were shown less a feud than a roadmap to riches, as bank leaders said they've been eyeing a stream of opportunities to buy struggling banks. As for former chair Mark Giles, who recently waged a battle to climb back on the board, that fizzled in seconds at the May 21 event as the majority of shareholders voted instead to re-install Giles' rival, developer Hunter Craig.</p>
<div class="sidebar">
<h2>Prior stories</h2>
<p>• May 15, 2012: "<a href="http://www.readthehook.com/103944/bank-battle-vnb-boss-wants-himself-and-craig-out">Bank battle: VNB titan wants back in (and Craig out)</a>"</p>
<p>• January 30, 2012: "<a href="http://www.readthehook.com/102740/not-immune-power-bank-va-national-profit-falls-42-percent">Not immune: VNB corporate profit falls 42 percent</a>"</p>
<p>• December 23, 2011: "<a href="http://www.readthehook.com/102524/bank-feud-chairman-giles-quits-vnb-other-directors">Bank feud: Chairman Giles quits VNB with other directors</a>"</p>
<p>&#8211;&gt; <a href="http://www.readthehook.com/special/biscuit-run-cash-grab">The Biscuit Run cash grab</a></p>
</div>
<p>Afterwards, Craig had little comment other than to agree with the words of the bank president that "we have won the decathlon" and that the recently-completed quarter was a strong indicator of profits and continuing growth. As Craig told a reporter, the first three months of 2012 were "strong as horseradish."</p>
<p>As for what Craig thought of the Giles effort to push him off the board, that was left unknown, as he declined other questions.<br /><br />But questions from shareholders percolated during the meeting, with the first coming from Richard Miksad, who phrased it in the form of an opinion: "I think the name of the bank," said Miksad, "is not as bright as it used to be in the community."</p>
<p>Chair Bill Dittmar, who took the reins in late December after the sudden Giles resignation, explained what happened at that fateful pre-Christmas meeting: that Giles demanded that he and Craig each nominate a slate of directors.<br /><br />"The board rejected that proposal," said Dittmar. "It was the sense of the board that it was inappropriate to put up a slate."</p>
<p>"Does that answer your question?" Dittmar asked.<br /><br />"Well, partially," Miksad replied.<br /><br />"I don't think you answered his question completely, Bill," said longtime Albemarlean Fred Scott. "What was it that triggered the change?"<br /><br />In the past two years, Craig has become a lightning rod for controversy, ever since an outgoing governor thanked him for his supposed bargain transfer of a flopped housing development called Biscuit Run for a state park. As it turned out, the $10 million purchase price was the tip of a costly iceberg, as Craig's crew reaped another $11 million in secret tax credits and then sued the taxpayers&#8211; in a still-pending matter&#8211; for nearly $20 million more.<br /><br />Craig, as a longtime member of VNB's loan committee (though he stepped down last fall), was allowed to peer into the business of some of the biggest business tycoons in Albemarle, and yet his Biscuit Run finances enjoy a legally-mandated shroud of secrecy.<br /><br />It wasn't until shareholder David Kudravetz stood up Monday that the issue Giles raised in a May 3 federal filing was asked: What does leadership think about the propriety of letting board members "pledge" their stock&#8211; something that Craig has reportedly done&#8211; to an in-market competitor bank?<br /><br />"It says something about your bank," said an approving Dittmar, "that another bank will accept your stock as pledge."<br /><br />Dittmar noted that VNB sought opinions from both an outside attorney and the federal Office of the Comptroller of the Currency. In the wake of that inquiry, the only ensuing policy change was a requirement that VNB directors must immediately notify shareholders when they pledge their shares as collateral.<br /><br />Dittmar also announced that over 80,000 shares of stock traded on Friday, the last business day prior to the meeting. The buzz was that Giles&#8211; who owned eight percent of the company last week&#8211; was trimming his position.<br /><br />This was the same day that a Hook reporter placed an order for 100 shares, what turned out to be a successful effort to gain admission to the meeting. Less successful (for this individual who owns no other listed securities) was the price: over $15 a share which promptly fell to $14 as the 80,000-share block depressed the price and cost us nearly $200 in one day.<br /><br />"You shoulda waited four more hours," joked president Glenn Rust after the meeting.<br /><br />It was Rust who presented a vision of VNB's future, and it came in response to a question from shareholder Bob Coleman about "excess capacity" and "excess capital" that might be parlayed into a better return.<br /><br />"We still want to do some type of merger," replied Rust, who noted the the Federal Deposit Insurance Corporation, or FDIC, has shown VNB seven banks on its list of takeover targets.<br /><br />"We've turned them all down, but we're continuing to look," said Rust. "I think there's going to be some out there we can pick off for a really good price."<br /><br />Coleman, however, expressed concern that VNB's stock price, at about 80 percent of book value, could put VNB "into play," i.e. find itself the target of a takeover.<br /><br />"We have not been approached by any bank, ever," said Rust.<br /><br />And with that, the meeting came to a close.<br /><br />"They've done a good job," remarked shareholder Dickie Tayloe. "They've been conservative, and that's good."</p>
http://www.readthehook.com/103990/feud-ends-giles-cashes-vnb-heads-buying-spree#comments_BreakingNewsFeaturedHunter Craigmark gilesVirginia National BankNewsTue, 22 May 2012 11:52:34 +0000hawes103990 at http://www.readthehook.comBank battle: VNB titan wants back in (and Craig out)http://www.readthehook.com/103944/bank-battle-vnb-boss-wants-himself-and-craig-out
<p>Just days before the annual shareholders meeting, former Virginia National Bank chairman Mark Giles, whose Christmas-time resignation led a wave of defections from the board of directors, has fired a shot across the bow of the ship he once captained. He's offering a "proxy contest," a power battle that might include an attempt to reclaim a leadership role at an institution that's been rocked by hints that it has been run more like a private club than a publicly held company.</p>
<div class="sidebar">
<h2>Prior stories</h2>
<p>January 30, 2012: "<a href="http://www.readthehook.com/102740/not-immune-power-bank-va-national-profit-falls-42-percent">Not immune: VNB corporate profit falls 42 percent</a>"</p>
<p>December 23, 2011: "<a href="http://www.readthehook.com/102524/bank-feud-chairman-giles-quits-vnb-other-directors">Bank feud: Chairman Giles quits VNB with other directors</a>"</p>
</div>
<p>"Many shareholders and customers have asked me if I would return to the board," Giles writes in a mid-March letter to VNB chair William Dittmar. "A great board can be a tremendous driver of shareholder value."</p>
<p>Giles goes on to recommend a slate of would-be directors who would be interested in serving only if Giles returns to the board. Conspicuously absent from the Gilesian slate is one of the bank's founders and its largest shareholder: Hunter Craig.</p>
<p>But coming on strong is the second-largest shareholder: Giles.</p>
<p>Having served as VNB's founding president from 1998 until he quietly withdrew from the executive role in 2007, Giles now holds 214,356 shares of the company, about eight percent of the stock.</p>
<p>To banking observer Richard Spurzem, recent moves by Giles clarify the "governance" issues to which Giles so cryptically alluded upon his December 19 resignation. Giles seems to be contending that Craig&#8211; who is suing the state to claim millions in taxpayer cash for a flopped real estate speculation called <a href="http://www.readthehook.com/86668/cover-bad-men-new-numbers-show-spiraling-cost-biscuit-run">Biscuit Run</a>&#8211; is bad for business.</p>
<p>In a government form he filed in May, seven weeks after his letter to chairman Dittmar, Giles complains that unnamed directors holding over 16 percent of company stock&#8211; which VNB's own documents confirm as Craig and father-in-law Wick McNeely&#8211; have pledged their VNB shares as collateral to an "in-market competitor" bank.</p>
<p>Giles further claims, in what's known as federal form 13D, that "significant business connections and interdependencies among various directors "have quashed the stock's value" and sent a "chilling effect" toward investors.</p>
<p>"I gave that 13D filing a lot of thought," Giles tells a reporter via voicemail. "And I stand by my filing in its entirety."</p>
<p>Spurzem amplifies what Giles hints at: that VNB is populated by Craig cronies, "good old boys" so enmeshed with each other that they've taken their eyes off any corporate board's primary purpose: delivering shareholder value.</p>
<p>Spurzem points out that 14 years after the stock went public, <a href="http://finance.yahoo.com/q?s=VABK.OB&amp;ql=0">VABK.OB</a> trades for barely 50 percent more than the original issue price and that even that has been propped up by share-buying board members. Spurzem contends that the bank has jeopardized earnings by spending too much on employee salaries, a situation that contributes to an alleged inability to muster sufficient cash to buy other banks.</p>
<p>"Charlottesville is a great market," says Spurzem. "They should be making money hand over fist, and they could be buying banks that are in trouble."</p>
<p>VNB president Glenn Rust, however, disputes such assertions. While declining to address Giles's potential battle for the board other than calling it "unfortunate," Rust says VNB is coming off a strong quarter that saw earnings leap from 11 cents to 19 cents per share compared to the same period a year ago.</p>
<p>"We had a really good first quarter," says Rust. "I'm more about staying focused on the future."</p>
<p>As for the debt-soaked shares held by Craig and McNeely, the latest VNB proxy statement notes that both men have "represented that these VNB shares are pledged to another financial institution as collateral for a loan unrelated to any real estate project or development," a statement that seems designed to downplay any taint from Biscuit Run.</p>
<p>While phone messages left for Craig and McNeely went unreturned, President Rust says that even if any pledging directors defaulted, their VNB shares would simply be sold on the open market like a foreclosed house.</p>
<p>"That's a conversation that keeps persisting," says Rust, disputing the notion that a competitor would gobble VNB. And as for raising money, Rust notes, "We would not have trouble getting access to capital if we wanted to buy another bank."</p>
<p>Chairman Dittmar also disputes things Giles alleges&#8211; including a claim Giles made to the government that he received "no response" to his March letter. "I immediately called him," says Dittmar, "and we spoke about it that day."</p>
<p>As for worries over pledged shares, Dittmar says there shouldn't be any. Dittmar says the bank invited multiple lawyers as well as the U.S. Office of the Comptroller of the Currency to determine whether pledging matters.</p>
<p>"The OCC's view was that if you stop directors from pledging their stock, then they won't want to be directors, and that's a bad thing," says Dittmar.</p>
<p>Rust and Dittmar urge a reporter to buy a share or two, which would allow him entrance to the next shareholders' meeting, which is slated for Monday, May 21 at the Boar's Head Inn. "It might be really boring," Dittmar warns.</p>
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http://www.readthehook.com/103944/bank-battle-vnb-boss-wants-himself-and-craig-out#comments_BreakingNewsFeaturedVirginia National BankNewsTue, 15 May 2012 00:39:30 +0000hawes103944 at http://www.readthehook.comNot immune: VNB corporate profit falls 42 percenthttp://www.readthehook.com/102740/not-immune-power-bank-va-national-profit-falls-42-percent
<p>Virginia National Bank, long seen as one of the bulwarks of the local financial services industry, saw its net income fall 42 percent last year, according to an earnings report released Friday.</p>
<div class="sidebar">
<h2>Prior stories</h2>
<p>December 2, 2011: "<a href="http://www.readthehook.com/102246/annals-banking-dabbling-dad-embroiled-botched-land-deal">Huguely mistake: Dabbling dad lost cash on Morgantown</a>"</p>
<p>December 23: "<a href="http://www.readthehook.com/102524/bank-feud-chairman-giles-quits-vnb-other-directors">Bank feud: Chairman Giles quits VNB with other directors</a>"</p>
</div>
<p>The new report, released January 27, shows that in addition to suffering a drop in profit, VNB found itself making greater allowances for loan losses&#8211; due in no small part to one customer which cost the bank $426,000 last year. As previously reported, VNB lent over $300,000 to the father of accused murderer George W. Huguely V for an ill-fated land speculation on Morgantown Road in Ivy, but that appears not to be last year's jumbo loss.</p>
<p>However, President Glenn Rust says he feels good about the overall results particularly because the bank itself achieved a gain&#8211; with its profit rising from $1.94 million to $2.0 million&#8211; and saw what Rust calls a "healthy" increase in average deposits of seven percent.</p>
<p>The total profit downturn, from $4.03 million to $2.34 million, Rust says, stemmed primarily from lower "performance fees" at VNBTrust, the wholly-owned subsidiary providing investment advice to institutions and wealthy individuals, which enjoyed a stellar 2010.</p>
<p>"It's pretty hard to put record earnings back to back," says Rust. "Last year was record earnings, and this year was solid earnings."</p>
<p>One thing the bank lost late year was four members of its board when chairman Mark Giles led an exodus over what the bank termed a dispute over the board's "composition." Two remaining board members, Hunter Craig and Wick McNeely, have pledged their shares and, separately, in a controversial quest to obtain taxpayer money to fund an ill-fated land speculation of their own, <a href="101906/flip-flopped-biscuit-run-men-want-20-million-more-taxpayers">sued the state</a>. (Replaced on the bank board by William Dittmar, Giles retained his separate seat as chair of VNBTrust.)</p>
<p>In another component of the new report, the bank increased the amount of what bankers call OREO, Other Real Estate Owned, which jumped from $329,000 at the end of 2010 to $4.2 million at the end of 2011. Rust says the bank has plans to put those foreclosed properties on the market and calls both the bank's charge-off rate of .18 percent and its loan loss provision of 1.28 percent "very healthy."</p>
<p>Amid some private shareholder grumbling that the bank spends too much on overhead, Rust notes that such expenses fell over half a million dollars last year, even as cash donations to non-profits reached $323,000.</p>
<p>"We haven't backed off our charitable giving," says Rust. "It's the right thing to do."</p>
http://www.readthehook.com/102740/not-immune-power-bank-va-national-profit-falls-42-percent#comments_BreakingNewsBusinessFeaturedVirginia National BankNewsMon, 30 Jan 2012 16:41:46 +0000hawes102740 at http://www.readthehook.comBank feud: Chairman Giles quits VNB with other directorshttp://www.readthehook.com/102524/bank-feud-chairman-giles-quits-vnb-other-directors
<p>A feud over corporate governance compounded an already painful December for a major Central Virginia financial institution. Virginia National Bank has experienced a leadership shake-up that has seen nearly one third of the board of trustees quit including the chairman, Mark Giles.</p>
<p>"My resignation is effective immediately," Giles tells President Glenn Rust in a December 19 letter that followed an apparently contentious meeting earlier that day. Neither Rust nor Giles, who spent <a href="http://www.readthehook.com/85988/news-quiet-switcheroo-vnb-chief-giles-leaves-presidency-november">nearly a decade as the Bank's first president</a> and who chaired the board since 2005, returned repeated telephone messages.</p>
<p>Two other board members, Ms. Claire Gargalli and Mr. Leslie Disharoon, also quit that same Monday in what the bank concedes was a disagreement over the composition of its board of directors. A fourth director on the <a href="http://www.vnb.com/index.php/investors/charlottesville_board">13-person board</a>, Neal Kassell, resigned two days later for unstated reasons.</p>
<p>In recent days, the usual discussions of loans and strategic growth at the home-grown but publicly-held&nbsp; financial institution (<a href="http://finance.yahoo.com/q?s=VABK.OB&amp;ql=0">VABK.OB</a>) may have been compounded by the financial struggles of two board members and the death of the bank's longtime chief financial officer.</p>
<p>On December 3, <a href="http://www.hillandwood.com/fh/obituaries/obituary.cfm?o_id=1332165&amp;fh_id=10702">Steve Perry</a>, the 52-year-old CFO and chief operations officer since the bank's 1998 founding, lost a battle with cancer.</p>
<p>Meanwhile, Virginia National may be dealing with unpleasant questions about the financial dealings of its vice-chairman, Hunter Craig. As regular <em>Hook</em> readers know, Craig, having already extracted $11.7 million in secret state tax credits, recently <a href="http://www.readthehook.com/101906/flip-flopped-biscuit-run-men-want-20-million-more-taxpayers">commenced litigation</a> attempting to extract another $19.5 million in the controversial credits to bail out a failed real estate speculation called Biscuit Run.</p>
<p>The key owners of the company that owned Biscuit Run prior to the property's December 2009 sale to the state as a park were Craig and his father-in-law and fellow VNB board member Wick McNeely. The two appear to owe another bank millions for the still-outstanding loan on the nearly 1,200-acre tract. In last year's proxy statement, the bank revealed that Craig and McNeely have pledged nearly all of their approximately $3 million each in VNB stock to an unnamed entity.</p>
<p>A phone message left with Craig was not returned, and phone conversations with departed board members Gargalli and Disharoon produced no information. However, according to a Form 8-K, a government-mandated disclosure of important events to company shareholders, the three board members who quit VNB Monday did so after disagreeing with other board members.</p>
<p>Giles submitted a typed resignation letter, while fellow board members Gargalli and Disharoon submitted short, hand-written resignations. Kassell's resignation was unrelated to the board disagreement, according to the federal document.</p>
<p>Board member William D. Dittmar Jr. has been tapped as the new chair.</p>
<p>Virginia National's stock was sold to the public in 1998 for $10 per share. After practically doubling within a year, the stock eventually retreated and then plateaued. It remained steady during the week of the shake-up at $16.90. However, after this story appeared online, the stock fell over 20 percent and settled at presstime on Tuesday, January 3, to about $14 per share.</p>
<p>A reporter's conversations with several analysts suggests that VNB presents an attractive take-over target at a level over $20 per share due to its high cost structure&#8211; the CEO alone takes in over $350,000 a year&#8211; and a strong loan portfolio. However, the analysts also noted that having two board members pledging away their stock and waging litigation against Virginia taxpayers harms the bank's reputation.</p>
<p>Another bank founded around the same time, Albemarle First, was eventually sold. Whether VNB has likewise pursued an acquisition has not been revealed, but its official public report indicates that the disagreement concerned the "composition" of the board of directors, a tantalizing hint that unease over allowing Craig to remain on the board could be a focus of the disagreement.</p>
<p>"I have seen things like this happen before when people disagree over selling a company," says one Charlottesville-based investment advisor. "It could also be related to the woes of one of their founders and big shareholders."</p>
<p><em>&#8211;updated 11:40am January 3 for print publication</em></p>
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http://www.readthehook.com/102524/bank-feud-chairman-giles-quits-vnb-other-directors#comments_BreakingNewsBusinessFeaturedHunter Craigmark gilesVirginia National BankNewsSat, 24 Dec 2011 00:01:31 +0000hawes102524 at http://www.readthehook.comQuiet switcheroo: VNB chief Giles leaves presidency.... in Novemberhttp://www.readthehook.com/85988/news-quiet-switcheroo-vnb-chief-giles-leaves-presidency-november
<p class="p1">&nbsp;</p>
<div class="captionLeftPortrait"><img src="/images/issues/2007/0626/news-giles.jpg" border="0" /><br /><b>Virginia National Bank Chairman Mark Giles drops his CEO title to focus on the bigger banking picture. <br /></b><small>PHOTO COURTESY VNB</small></div>
<p>&nbsp;</p>
<p class="p1">Virginia National Bank's founding CEO and chairman of the board Mark Giles is not being pushed out. "Heck no," he exclaims about his new role at the bank he's helmed since 1998. "This was my idea."</p>
<p class="p1">Giles, 52, is dropping the CEO title, which goes to Glenn Rust, who quietly assumed Giles' title of president in November.</p>
<p class="p1">The idea, says Giles, is for him to spend more time on marketplace opportunities and strategic issues, including acquisitions.</p>
<p class="p1">"I am a significant shareholder, and with this move I'm making an additional investment," says Giles. Once that's done, he'll hold an eight percent piece of the VNB pie.</p>
<p class="p1">One thing that worried him about the switch was that people would think he's going somewhere. "You want to have new blood," says Giles. "I would never want to be the guy who says we should've made this move a year ago."</p>
<p class="p1">Virginia National Bank was started by area businessmen Hunter Craig, Wick McNeely, and Reid Nagle in 1998 with $18 million raised from the community. Today VNB is a commercial bank with $299 million in deposits and branches in Buckingham, Orange, and Winchester. Its trust and asset management subsidiary handles $300 million.</p>
<p class="p1">The founders found Giles, a UVA grad, in Houston, where he was running the then $1.5 billion Sterling Bank, which has since grown to $4 billion in deposits.</p>
<p class="p1">In Houston, Giles worked with Rust, who was chief operations officer and executive VP until he resigned in January 2006.</p>
<p class="p1">"We're in a good position, with the possibility of being an acquirer," says Giles, reached on vacation with his family. "I view this as a great time to do this... and I'm not leaving."</p>
<p class="p1">#</p>
http://www.readthehook.com/85988/news-quiet-switcheroo-vnb-chief-giles-leaves-presidency-november#commentsmark gilesVirginia National BankNewsWed, 02 Feb 2011 08:57:41 +0000admin85988 at http://www.readthehook.com